Leading information technology services provider
Cognizant Technology Solutions Corporation
) posted a net income came in at $243.6 million or $0.79 per
diluted share in the first quarter of 2012 compared to a net income
of $208.0 million or $0.67 per diluted share in the year-ago
quarter. The results were in-line with the Zacks Consensus
Cognizant reported revenues of $1.71 billion in the first
quarter of 2012, up 24.8% year over year and up 2.9%
On a segment basis, financial services segment including
insurance, banking, and transaction processing, grew 2.2%
sequentially and 21.9% year over year. This segment represented
40.6% of total revenue for the quarter.
Healthcare posted a sequential growth of 2.3% and year-over-year
growth of 33.9%, accounting for 27.3% of total revenue in the
Retail manufacturing logistics result was also strong, growing
5.0% sequentially and 22.0% year over year, representing 19.6% of
revenues for the quarter.
The remaining 12.5% of revenues came primarily from other
service oriented industries like communications, media and high
tech, growing 3.1% sequentially and 20.5% year over year.
Operating margin came in at 20.4%, up from 20.1% in the previous
quarter. During the quarter, Cognizant repurchased shares for $43
million and also expanded the program buy-back program by $400
million to $1 billion. Approximately $423 million of shares have
been repurchased under this program. Cognizant ended the quarter
with cash and investments of $1.3 billion, down by $17 million.
Going forward, management expects revenues of at least $1.79
billion in the second quarter of 2012. EPS is likely to be $0.80.
Excluding stock-based compensation expense, EPS is forecasted at
However, Cognizant trimmed its outlook for 2012 primarily due to
a slower than anticipated acceleration in demand. Clients continue
to look for cost containment along with business transformation in
a weak economic environment.
For the full year 2012, management now expects revenues to rise
at least 20% annually to $7.34 billion, down from the previous
forecast of $7.53 billion. EPS is likely to be $3.36, down
from the previous estimate of $3.43. Excluding stock-based
compensation expense, EPS is forecasted at $3.62, down from the
earlier forecast of $3.69.
Nevertheless, Cognizant remains well diversified among key
verticals such as financial services, health care & life
sciences, retail, manufacturing and logistics, which will help it
to maintain its top line.
COGNIZANT TECH (CTSH): Free Stock Analysis
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